COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NOS. 59385, 59395 ARTISAN CUSTOM-MAID, INC., : : Plaintiff-Appellant : : JOURNAL ENTRY vs. : and : OPINION LARRY E. BUYCK, ET AL., : : Defendants-Appellees : : and : : DAVID MASSERIA DRYWALL, : : Defendant-Appellant : DATE OF ANNOUNCEMENT OF DECISION : MARCH 26, 1992 CHARACTER OF PROCEEDING : Civil appeal from : Common Pleas Court : Case No. 171,631 JUDGMENT : REVERSED AND REMANDED. DATE OF JOURNALIZATION : _______________________ APPEARANCES: For plaintiff-appellant: Keith E. Belkin GRAY, LURIA AND BELKIN 1920 The Superior Building 815 Superior Avenue, N.E. Cleveland, Ohio 44114-2785 For defendants-appellees, Barry J. Miller Larry E. Buyck and Lena M. Z. Sonali Bustamante Buyck: ARTER & HADDEN 1100 Huntington Building Cleveland, Ohio 44113 For defendant-appellant, Douglas R. Fouts David Masseria Drywall: 6175 S.O.M. Center Road P.O. Box 39414 Solon, Ohio 44139 - 2 - NAHRA, P.J.: David Masseria Drywall, Inc. and Artisan Custom-Maid, Inc. appeal from the trial court's decision granting summary judgment in favor of appellees Larry and Lena Buyck. For the reasons set forth below, we reverse. This case arose out of a home construction contract. The Buycks contracted with Stance Enterprises, as general contractor, to construct their home for $196,632.00. The contract provided that the Buycks would pay the contract sum "subject to additions and deductions as provided in the contract documents". The contract provided that changes in the contract amount and/or the contract work could only be made by change order. It defined a change order as a written order to the contractor issued by the owner or architect, signed by the contractor. Termination of the contract by the owner required certification by the architect of sufficient cause for termination. The parties agreed to a change order which raised the contract price to $203,319.83. The Buycks subsequently sent James Beverly, President of Stance Enterprises, a letter dated September 19, 1988. The text of the letter reads as follows: Re: Construction of New Residence, S/L Sugarbush Lane, Gates Mills, Ohio Dear Mr. Beverly: -3- Your employment as contractor for the above referenced project has been terminated per our letter of September 16, 1988. The following is the current job cost accounting. Contract amount including approved extras $203,319.83 Total of funds paid out to date 138,441.60 Estimated cost to complete 81,970.00 Estimated cost of substitute housing through the completion of the project 9,915.00 Estimated balance due Stance Enter- prises, Inc. at the completion of the project ($ 27,006.77) Pleased (sic) be advised that we are not waiving any of our rights or remedies pursuant to the contract. Sincerely, Larry E. Buyck Lena M. Buyck Subcontractors David Masseria Drywall, Inc. and Artisan Custom-Maid, Inc. were not paid for their work on the Buycks' residence. They filed mechanics' liens on the Buycks' home. Artisan subsequently filed a complaint to marshall liens, to foreclose, and for other equitable relief. The Buycks, Stance, and Masseria, inter alia, were named as defendants. Masseria brought cross-claims against Stance and Beverly. The Buycks filed a Motion to Dismiss the Complaint. They asserted that their letter of September 19, 1988 constituted a valid change order which adjusted the contract price to $111,776.00. Since the Buycks had already paid the amount of $134,449.30, they claimed that they had paid in full, such that Artisan, Masseria and others were not entitled to mechanic's liens pursuant to R.C. 1311.011(B)(1). -4- The trial court treated the Buycks' motion as one for summary judgment and granted it. The court ordered removal of all mechanics' liens, and stated that there was no just reason for delay. Artisan and Masseria both timely appealed, and their appeals were consolidated for hearing and disposition upon appellees' motion. Appellants' assignments of error are 1 interrelated and will be addressed together. 1 Masseria's assignments of error read as follows: A. THE TRIAL COURT ERRED IN DETERMINING THAT THE BUYCKS HAD PAID THE CONTRACTOR IN FULL WITHIN THE MEANING OF R.C. 1311.011(B)(1). THAT DECISION WAS CONTRARY TO LAW. THE TRIAL COURT SHOULD HAVE ADDITIONALLY DETERMINED THAT THERE WAS A GENUINE ISSUE OF MATERIAL FACT AS TO WHETHER THE BUYCKS PAID IN FULL AND THEREFORE DENIED THE BUYCKS' MOTION FOR SUMMARY JUDGMENT. B. THE TRIAL COURT ERRED IN FAILING TO CONCLUDE THAT APPELLEE BUYCKS' AFFIDAVIT WAS NOT TIMELY FILED WITH RESPECT TO MASSERIA'S MECHANIC'S LIEN AFFIDAVIT. Artisan's assignments of error read as follows: 1. THE CUYAHOGA COUNTY COURT OF COMMON PLEAS ERRED IN FINDING THAT PLAINTIFF-APPELLANT WAS NOT ENTITLED TO A VALID MECHANIC'S LIEN AGAINST THE REAL PROPERTY OWNED BY DEFENDANTS-APPELLEES LARRY E. BUYCK AND LENA M. BUYCK. 2. THE CUYAHOGA COUNTY COURT OF COMMON PLEAS ERRED IN FINDING THAT DEFENDANTS-APPELLEES LARRY E. BUYCK AND LENA M. BUYCK HAD "PAID IN FULL" ON THE ORIGINAL CONTRACT PRICE FOR THE CONSTRUCTION OF THE HOME ON THEIR REAL PROPERTY. 3. THE CUYAHOGA COUNTY COURT OF COMMON PLEAS ERRED IN GRANTING THE MOTION FOR SUMMARY JUDGMENT FILED BY DEFENDANTS-APPELLEES LARRY E. BUYCK AND LENA M. BUYCK. -5- R.C. 1311.011(B)(1), effective January 1, 1978 - April 10, 1991, reads as follows: (B) Notwithstanding sections 1311.02 to 1311.24 of the Revised Code, all liens except mortgage liens that secure payment for work done, or for labor, materials, machinery, or fuel furnished in connection with a home construction contract or in connection with a dwelling or residential unit of condominium property, that is the subject of a home purchase contract are subject to the following conditions: (1) No subcontractor, materialman, or laborer has a lien to secure payment for work done, or for labor, materials, machinery, or fuel furnished by him, in connection with a home construction contract between the original contractor and the owner, part owner, or lessee or in connection with a dwelling or residential unit of condominium property, that is the subject of a home purchase contract, if the owner, part owner, or lessee paid the original contractor in full or if the purchaser has paid in full for the amount of the home construction or home purchase contract price, and the payment was made prior to the owner's, part owners', or lessee's receipt of a copy of an affidavit of mechanic's lien pursuant to section 1311.07 of the Revised Code. An owner, part owner, or lessee may file, with the county recorder of the county in which the property that is the subject of a home construction contract or a home purchase contract is situated, an affidavit that he has made payment in accordance with this division. Except if the owner, part owner, or lessee is guilty of fraud, any lien perfected on the property by any subcontractor, materialman, or laborer for work done, or for labor, materials, machinery, or fuel furnished shall be void and the property wholly discharged from the lien, if the lien was perfected after full payment was made in accordance with this division. The recorder shall index and record the affidavit in the same manner that releases of mortgages and other liens are indexed and recorded, and shall receive the same fees for indexing and recording the affidavit that are provided for the recording of leases. (Emphasis added.) Effective April 10, 1991, R.C. 1311.011 was revised. R.C. 1311.011(B)(2) provides in part that "the total amount of all -6- liens ... that may be enforced in lien foreclosure proceedings shall not exceed the amount due under the home construction contract that has not been paid to the original contractors ...." The revisions to R.C. 1311.011(B)(2) clarified the intent of the legislature by adding a definition of "amount due" as follows: For the purpose of this section, the amount due under a home construction contract or a home purchase contract is the unpaid balance under the home construction contract or the home purchase contract, minus the cost to complete the contract according to its terms and conditions, including any warranty or repair work. Appellees' argument that appellants are not entitled to mechanics' liens rests on their conclusion that their September 19th letter constituted a valid change order which operated to reduce the contract price. The Buycks' affidavit, attached to their summary judgment motion, states that their September 19th letter was Change Order No. 2; that it adjusted the contract price from $203,661.00 to $111,776.00; that the Buycks paid Stance $134,449.30 such that Stance was paid in full pursuant to R.C. 1311.011(B)(1). They also state that Stance never contested Change Order No. 2 nor requested further payment under the contract. Accordingly, the Buycks claim that Stance waived the contractual requirements for change orders, that they paid the contract price in full, and that the subcontractors are not entitled to liens. Other than the contract, they attached no other evidence to the motion. In support of their waiver claim, the Buycks cite Frantz v. Van Gunten (1987), 36 Ohio App. 3d 96. In that case, the court -7- held that contractual requirements for written change orders can be waived where there is clear and convincing evidence that the alterations were made with the knowledge and participation of all concerned parties. The home owners had requested additions to the construction, and expected to pay for the additions. The home owners also testified that the contractor was performing the additional work they requested. The jury compensated the contractor for the additional work, and their verdict was affirmed on appeal. In this case, the contract requires written change orders, which must be signed by the contractor. The Buycks' September 19th letter is not designated as a change order and is not signed by the contractor. Although the Buycks claim that Stance's failure to object constituted waiver, Stance had no obligation to object. Unlike the Frantz v. Van Gunten case, see supra, there is no evidence that Stance "participated" in the requested change or otherwise demonstrated assent to the change. The Buycks' September 19th letter was a termination of the contract, not a change order. Therefore, it did not reduce the contract price. Whether the contractor was paid in full as of the termination of the contract pursuant to R.C. 1311.011(B)(1) is a question of fact to be determined by the trial court. The trial court must also determine whether there is an amount due under the contract which is subject to mechanics' liens pursuant to R.C. 1311.011(B)(2). We reverse the summary judgment in favor of the Buycks and remand the case for trial. -8- This cause is reversed and remanded for proceedings consistent with this opinion. It is, therefore, considered that said appellant recover of said appellees its costs herein. It is ordered that a special mandate be sent to said court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. *POLLEX, J., CONCURS. (*SITTING BY ASSIGNMENT: Judge Robert C. Pollex, Probate/Juvenile Court of Wood County.) HARPER, J., DISSENTS. JOSEPH J. NAHRA PRESIDING JUDGE N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announcement of decision (see Rule 26). Ten (10) days from the date hereof this document will be stamped to indicate journalization, at which time it will become the judgment and order of the court and time period for review will begin to run. .